Saturday, May 15, 2010

Guilty as charged

…if by liberal they mean someone, who looks ahead and not behind, someone who welcomes new ideas without rigid reactions, someone who cares about the welfare of the people—their health, their housing, their schools, their jobs, their civil rights, their civil liberties—if that is what they mean by a “liberal,” then I am proud to be a liberal.

John F. Kennedy
September 14, 1960


rcorum said...

Kennedy was a liberal in many respects, but he was also a fiscal conservative. There is no comparison between Kennedy and this current administration which seems to be willing to spend at will. Here is a Kennedy quote that people might find interesting. I found this in a larger article about tax cuts and it did not cite the quote, but if needed I will be glad to hunt it down.

"Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now." John F. Kennedy

Does anyone think that sounds like President Obama and those in congress who think that all we have to do is print more money. There is going to be a pay day someday for our almost total lack of fiscal responsibility as a country and that is a sin found on both sides of the isle.

Chris said...

The first part of the quote, that you so conveniently left out, says this:

"If by "Liberal" they mean, as they want people to believe, someone who is soft in his policies abroad, who is against local government, and who is UNCONCERNED WITH THE TAXPAYER DOLLAR, then the record of the party and its members demonstrated that we are not that kind of "Liberal."

Anonymous said...

clearly, there is no contradiction in the portion of the quote Larry posted here and the additional lines found by Chris. People who have liberal views can also have responsible fiscal positions, for example Bill Clinton.

rcorum, remember the Bush years and the record deficiets? The Wall St crash was due to greed and unregulated markets. Bush and his team appropriated the first huge lump of bailout dollars. Obama had little choice if the economy was to be salvaged.

I guess my point is, just be fair.

rcorum said...

Anon 8:23, I agree. Bush spent with the best of them. I would question the amount of blame he deserves for the housing crisis, but that is a discussion for another day. Some how some way we have got to get our fiscal house in order and I do not believe that it will come through tax hikes. From what I have read about Kennedy I think we would have agreed. I believe that Obama is a tax and spend liberal, and from all the evidence I have seen Kennedy was not.

Jerry said...

I wish to thunder we had today a liberal who was cut from the same cloth as JFK. Although he was a child of wealth, he understood the sacrifice needed to preserve both prosperity and freedom. He served valiantly in WWII and as the leader of the free world he stood down the enemies of freedom. Many forget that in his 1960 campaign one of his primary attacks against Nixon was that of the “missile gap” between the US and USSR; he of course was advocating for a stronger defense against the Soviets. At home he confronted directly those who would deny civil rights to people because of race and used the power of the Government and even the military (101st into Oxford) to ensure integration. Further, his administration attacked corruption both in business (he stood down US Steel) as well as in the unions (his Attorney General, RFK, was vigorous in his prosecution of union misdeeds); he did not play favorites on that score. Yet, he understood that the free enterprise system was the backbone of the economic strength of our country and implemented policies that both cared for those in need while he cut taxes to stimulate growth of the private sector. Unfortunately, I do not think that JFK would be classified as a liberal today, and would have a tough time in the modern Dem party; I do not believe he would be welcome in the Rep either. So, again I state that I wish we had a liberal who was cut from the same cloth as was JFK.

Daniel said...

Yes, Richard. You're being overly simplistic. Obama has been President for less than 1.5 years now, and you're blaming him for a process than has been in the works for 8-10 years. Quick solutions are not possible, and sometimes the best choice doesn't always seem right at first.

I don't think you've looked close enough at the underlying data to see how close we were to the disaster of the 1980's S&L crisis. We're lucky to be in this bad of a shape, and we're already seeing the signs of a return to a stable economy, at which point, our fiscal policies will likely change. President Bush started the bailout, and while completely unpopular, was incredibly necessary to prevent a greater depression. Look at Japan's lost decade -- that could have been the US.

I know how adamant you are that no one spoon-feeds you data, so please take a look at this link on economic recovery Job Creation: Bush v. Obamat.

One simple economic theory is that an increase in government outlays will give the economy a boost to increase revenue, thereby minimizing the long term effect of debt.

Obama is not the super-liberal, fiscally irresponsible President that you'd like to paint him as. You're a broken record on your distrust of Obama, and every time the record plays, its a stretch to even be on topic. It's clear you're operating on some fear/insecurity about who Obama is. Why else would you repeatedly post the same fear-mongering rhetoric on the blog of someone you have never even met? I think it would be wise to lay off the 24 hour news cycle.

Larry James said...

In terms of taxes, the marginal tax rate when JFK took office was over 70% for the top brackets. Reforming that rate doesn't make one a supply side, Reagan conservative.

Jerry said...

The actual top tax rate when JFK took over was 91%, with an maximum effective rate of 87%; both were applied to income over $400,000; see this url for rates from 1913 to 2003:

The top rate stayed at 91% until 1964 when it dropped to 77%, then 70% in 1965 where it remained until about 1981-82 when it dropped to 50% over varying amounts from $169,000-$220,000.

The key point is that the top marginal rates were much higher in the past and dropping them does not mean that one is a Reagan style conservative; not by any means.

However, JFK did understand the relationship between tax policy and economic growth.

Unfortunately, I do not believe there are many people on either side of the aisle that currently have JFK's knowledge, balance, and fortitude.

A recent article that I posted showed that, according to the CBO, in order to balance the projected 2025 budget (which is just 15 years from now), and if the rates only on the top two marginal rates were increased, thus leaving the lower rates as they now are, then the rates would have to go to 85% and 91% respectively. Now, that would mean that the 85% would be applied to family incomes of around $150,000 and the 91% would be applied to family incomes of somewhere between $250-300,000.

Would such a policy be sustainable? I'm interested in all thoughts.

Anonymous said...

Jerry, all I say is wow. Daniel, your comments do not deserve a reaction. Larry, did anyone ever say Kennedy was a supply sider? By the way that 70% tax rate made life very difficult for Harry Truman who lacked the independent wealth of Kennedy. I sure hope you don't think a 70% tax rate is fair. Got to go do a wedding now. Someone please answer Jerry.

Richard Corum

Anonymous said...

Daniel, you've outed yourself. Take one of those blue pills before you post again, maybe two. Richard is not a fear-mongerer. His posts are well-reasoned and I've noted more than one occasion where he revises his thinking after appropriate feedback from those who disagree.

I sure hope no one trusts you with a budget, or master key.

Jerry said...

Current marginal rates for married filing jointly are as follows:

Not over $36,900 15%
$36,900-89,150 28%
$89,150-140,000 31%
$140,000-250,000 36%
Over $250,000 39.6%

Note that these rates are cumulative, meaning that you pay 15% up to $36,900, then 28% of $ between $36,900 and $89 150, and proceed upward.

Now according to the CBO estimates of what it will take to balance the budget by 2025, the Feds would take 85% of all married filing jointly income over $140,000 and 91% over $250,000, provided the lower rates are untouched.

What this means, is that although we may need to increase tax rates, the problem is not that we are taxing too little, but that we are spending too much. The CBO is very clear that our current path is unsustainable. The current 2011 budget proposals call for borrowing 42 cents out of every dollar we spend. Is this reasonable.

My final question is this: Whose best interest is served if the country is bankrupt?

Larry James said...

Thanks for the discussion and, Jerry, thanks for the information. My only point was that comparing JFK to any political leaders on tax policy must take into consideration the very different context in which he worked. For him to suggest a tax cut in 1961 when the marginal rates were so high is quite different from suggesting tax cuts today. As for the real challenge we have due to the meltdown caused by deregulation and greed and to spending on two wars, it seems clear to me that we need a new approach wtih investment in new industries and in new takes on educating the workforce. It is very complicated because everything in the economy is interrelated. Without new industries and product options it will be very hard to make progress. For example, we need to explore alternative energy sources and production at the same time we take a hard and careful look at military spending, something no one wants to do.

Anonymous said...

Tax rates of 70% and more are not only unsustainable, but simply confiscatory. I think Kennedy was recognizing a human reality - why would anyone work harder to pay 70%(much less 90%) of the extra amount earned to the govt.? I would truly prefer to make $1 less than any amount that was simply confiscated from me at those outrageous rates. I think our current high rate of 40% far more reasonable, and sustainable. I think the issue is more likely that we don't actually collect that amount due to innumerable exemptions, credits, deductions ... i.e. loopholes. If those making over $250K a year were truly paying 40%, we'd be collecting a lot more money. I wonder what the effective rate on those earning, say, $500K and up really is. I doubt it is anywhere close to 40% for the most part.